Uber is estimated to be worth some $40 billion, and has 850 employees. Uber also has over 163,000 drivers (as of December – the number is expected to double by June), who average $17 an hour in Los Angeles and Washington, D.C., and $23 an hour in San Francisco and New York.

For one thing, GM workers don’t have to pay for the machines they use. But Uber drivers pay for their cars – not just buying them but also their maintenance, insurance, gas, oil changes, tires, and cleaning. Subtract these costs and Uber drivers’ hourly pay drops considerably.

For another, GM’s employees get all the nation’s labor protections.

These include Social Security, a 40-hour workweek with time-and-a-half for overtime, worker health and safety, worker’s compensation if injured on the job, family and medical leave, minimum wage, pension protection, unemployment insurance, protection against racial or gender discrimination, and the right to bargain collectively.

Not to forget Obamacare’s mandate of employer-provided healthcare.

The rise of “independent contractors” Is the most significant legal trend in the American workforce – contributing directly to low pay, irregular hours, and job insecurity.

Uber workers don’t get any of these things. They’re outside the labor laws.

Uber workers aren’t alone. There are millions like just them, also outside the labor laws — and their ranks are growing. Most aren’t even part of the new Uberized “sharing” economy.

What they all have in common is they’re not considered “employees” of the companies they work for. They’re “independent contractors” – which puts all of them outside the labor laws, too.

What makes them “independent contractors” is the mainly that the companies they work for say they are. So those companies don’t have to pick up the costs of having full-time employees.

The rise of “independent contractors” Is the most significant legal trend in the American workforce – contributing directly to low pay, irregular hours, and job insecurity.

What makes them “independent contractors” is the mainly that the companies they work for say they are. So those companies don’t have to pick up the costs of having full-time employees.

But are they really “independent”? Companies can manipulate their hours and expenses to make them seem so.

It’s become a race to the bottom. Once one business cuts costs by making its workers “independent contractors,” every other business in that industry has to do the same – or face shrinking profits and a dwindling share of the market

Some workers prefer to be independent contractors because that way they get paid in cash. Or they like deciding what hours they’ll work.

Fortunately, there are laws against this. Unfortunately, the laws are way too vague and not well-enforced.

Mostly, though, they take these jobs because they can’t find better ones. And as the race to the bottom accelerates, they have fewer and fewer alternatives.

Fortunately, there are laws against this. Unfortunately, the laws are way too vague and not well-enforced.

For example, FedEx calls its drivers independent contractors.

Yet FedEx requires them to pay for the FedEx-branded trucks they drive, as well as the FedEx uniforms they wear, and FedEx scanners they use – along with insurance, fuel, tires, oil changes, meals on the road, maintenance, and workers compensation insurance. If they get sick or need a vacation, they have to hire their own replacements. They’re even required to groom themselves according to FedEx standards.

FedEx doesn’t tell its drivers what hours to work, but it tells them what packages to deliver and organizes their workloads to ensure they work between 9.5 and 11 hours every working day.

If this isn’t “employment,” I don’t know what the word means.

In 2005, thousands of FedEx drivers in California sued the company, alleging they were in fact employees and that FedEx owed them the money they shelled out, as well as wages for all the overtime work they put in.

Last summer, a federal appeals court agreed, finding that under California law – which looks at whether a company “controls” how a job is done along with a variety of other criteria to determine the real employment relationship – the FedEx drivers were indeed employees, not independent contractors.

We need a simpler test for determining who’s an employer and employee. … I suggest this one: Any corporation that accounts for at least 80 percent or more of the pay someone gets, or receives from that worker at least 20 percent of his or her earnings, should be presumed to be that person’s “employer.”

Does that mean Uber drivers in California are also “employees”? That case is being considered right now.

What about FedEx drivers and Uber drivers in other states? Other truck drivers? Construction workers? Hair salon workers? The list goes on.

The law is still up in the air. Which means the race to the bottom is still on.

It’s absurd to wait for the courts to decide all this case-by-case. We need a simpler test for determining who’s an employer and employee.

I suggest this one: Any corporation that accounts for at least 80 percent or more of the pay someone gets, or receives from that worker at least 20 percent of his or her earnings, should be presumed to be that person’s “employer.”

Congress doesn’t have to pass a new law to make this the test of employment. Federal agencies such as the Labor Department and the IRS have the power to do this on their own, through their rule making authority.

They should do so. Now.

ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written thirteen books, including the best sellers “Aftershock” and “The Work of Nations.” His latest, “Beyond Outrage,” is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His new film, “Inequality for All,” is now available on Netflix, iTunes, DVD, and On Demand.

Comments

Robert Reich, whose opinions I usually respect, has his head up his ass on this one. What about the self-employed who don’t have any of the employer mandated protections he mentions along with the “independent contractors”? They don’t get any of the protections he mentions – 40-hour workweek with time-and-a-half for overtime, worker health and safety, worker’s compensation if injured on the job, family and medical leave, minimum wage, pension protection, unemployment insurance, protection against racial or gender discrimination, and the right to bargain collectively. In addition they are taxed twice for social security since they pay both the employer and the employee contributions. The solution is not to turn everyone into “employees” but to provide government mandated protections to all workers including the self-employed.

John, the “employer-mandated protections” you mention — healthcare, overtime pay, guaranteed 40-hour workweek — are now being denied many, many “independent contractors” by more and more companies using the ruse of 20-hour workweeks. You know this simple device of hiring two part-time workers for a job one used to do is the scam being worked by companies to evade Federal workplace protections and benefits for full-time employees. And I’d bet there are a hell of a lot more “independent contractors” working then there are self-employed.
I can’t see that Reich’s head is anyplace it shouldn’t be.

Bob, there are a huge number of self-employed: landscapers, plumbers, electricians, contractors of various sorts, window cleaners (of which I am one), house cleaners, small businessmen and women of all sorts, chimney sweeps … I could go on, but time doesn’t permit. The point is (aside from being screwed by Reagan and Greenspan who doubled the FICA tax for self-employed) that Federal standards should be set for all workers aside from the employer-employee relationship which is or should be a thing of the past.

I think the test oughta be what the WORKERS consider themselves to be.
Those Fed-Ex drivers are obviously employees being jerked around by the company. Hair salon workers, on the other hand are, for the most part, actually are independent contractors. Some construction workers are truly employees, others are independent workers and those Uber drivers inhabit an in-between gray area.
A more stringent test needs to be created, but I don’t think it’s a simple as Reich’s example here.

The crucial thing is who sets the price. If the worker sets the price, then he or she is truly an independent contractor. If a third party sets the price, then they’re not. This also applies to other working conditions like time. Who sets the time of the service, the worker or somebody else?

Price and scheduling aren’t always the decider. If the “going rate” for a drywall installer is (as an example) $15/hour, he’s still an independent contractor. And, if the job must be done on Tuesday to be painted on Wednesday, he’s still an independent contractor.
Another important decider is whether the worker can take jobs from any employer.

First of all no independent drywall installer is going to quote a job as “$15. an hour.” You would quote a price for the job, and you would end up making a lot more than $15. an hour. Second, if you don’t like the time frame the customer wants, you don’t have to take the job or you can negotiate a different time frame.

I know quite a few people who drive for both Uber and Lyft and all of them enjoy it, despite having to pay for their own vehicles and maintenance. None of them seem to complain about it. I myself rarely use cabs anymore and am glad for these ride sharing services.

All the people you know enjoy driving for Uber and Lyft “despite having to pay for their own vehicles and maintenance.” And, “None of them seem to complain about it.” And, you don’t use cabs much anymore and are glad Uber and Lyft exist.
Now we know how you feel.